Thanks duckster for the comprehensive response.

So depreciation would work in my favor because say I had a net rental profit of $1000 (Which is left over in my account after all expenses have been deducted other than depreciation) but on paper instead of paying tax on that $1000 depreciation kicks in and shows as a net rental loss and therefore saving tax? So negative gearing but with positive cashflow???

How do banks look upon this when you go to take out more loans.. if i had say 10 of these properties.. would the bank take into account the depreciation or would they see me with 10 loans on 10 negatively geared properties??

Thanks for the help!